Japan’s Nippon Steel (5401.T) has announced a landmark acquisition of U.S. Steel (X.N) in a deal valued at $14.9 billion, marking a strategic move to expand its global crude steel capacity. The offer, made entirely in cash, represents an equity value of approximately $14.1 billion. This acquisition positions Nippon Steel to reach 100 million tonnes of global crude steel capacity while significantly boosting its production capabilities in the United States. U.S. Steel’s shares experienced a notable surge of about 28% to $50.35 in premarket trading, reflecting market enthusiasm.
The deal comes at a crucial time as the automotive industry, a significant consumer of steel, is expected to increase production following recent agreements with labor unions. Nippon Steel aims to leverage this demand surge and capitalize on the rising steel prices. Notably, the acquisition is expected to be finalized in the second or third quarter of 2024, subject to regulatory approvals. The financial advisory team includes Citi for NSC, Barclays Capital, Goldman Sachs, and Evercore for U.S. Steel.
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